International Best Practice Standards

International Best Practice Standards

Just as it is the case for prudential and AML/CFT supervision, there are international standards on Market Conduct Supervision. For example, the OECD’s High-Level Principles of Financial Consumer Protection, and the World Bank’s Good Practices for Financial Consumer Protection. The FSRA’s regulatory and supervisory framework is aligned with these standards which both advocate for consumer rights through the key principles outlined below.

Principles

1. Equitable and Fair treatment of consumers - FSPs should ensure that their customers receive the same high level of service regardless of race, gender, age or socioeconomic status. This includes ensuring that unfair, misleading, aggressive or discriminatory practices are addressed timeously. Financial products and services should be designed and distributed having regard to the needs of the consumers in the target market, and that contractual terms and conditions should be fair.

2. Access and Inclusion - the FSRA seeks to support consumers’ access to, and use of financial products and services, aligning it with the goal of an inclusive non-bank financial sector in Eswatini. There should be no barriers that prevent consumers from accessing and using financial products and services in the formal, regulated financial system. FSPs are encouraging to develop products and services that attract previously excluded groups e.g. forcibly displaced persons, elderly and the youth, women, MSMEs, people with disabilities etc.

3. Transparency and Disclosure - FSPs should be upfront about key terms and conditions of products and services so that consumers can make informed decisions. Information provided should be clear, timely and not misleading to consumers.

4. Protection of Consumer Assets against Fraud, Scams, and Misuse - FSPs should ensure the safety of consumer assets by implementing appropriate measures to prevent fraud, scams and misuse. This includes ensuring that there are clear and transparent liability arrangements to protect consumers in the event of financial loss.

5. Protection of Consumer Data and Privacy - FSPs should respect consumer privacy and handle consumers’ personal information securely and in accordance with the Data Protection Act, 2022 and other relevant financial services laws. FSPs should implement robust data protection measures to prevent unauthorized access and data breaches. Consumers should be informed about how their data is being used and when instances of privacy breaches occur.

6. Complaints Handling and Redress - FSPs should establish accessible, clear, free, fair, timely and efficient complaint resolution processes and procedures. This includes FSPs notifying consumers on the alternative resolution mechanism (i.e. Office of the Ombudsman of Financial Services) in the event that the customer is not satisfied with the responses given by FSP on a submitted complaint.

7. Financial Literacy and Awareness/ Consumer Education - The FSRA has a dedicated Unit under the Market Conduct Department that focuses on providing financial education to the public. However, FSPs are also expected, as good corporate citizens, to also play their part and invest in financial education programs to help consumers understand the benefits and risks of the products and services that are sold, as well as their rights in order to help them make informed financial decisions and not to only focus on marketing initiatives.

8. Competition - the FSRA expects FSPs to refrain from anti-competitive practices that can infringe on consumer’s rights to be able to search, compare, where appropriate, switch between products and service providers easily.